Mike Ashley, the founder of Sports Direct, has been abusing the legal system to “intimidate” Dave King, the chairman of Rangers football club, and pursue a vendetta against his rival, a high court judge has said.

The comments are the latest setback for the billionaire, who on Tuesday was chastised by the same judge for his legal tactics in a separate strand of his battle with Rangers. Sports Direct claims Rangers breached the terms of a confidentiality agreement between the retailer and the football club, which is also the subject of a court gagging order.

On Friday, the parties returned to court to hear Mr Justice Peter Smith clear King of contempt of court and explain his reasons for refusing Ashley’s previous efforts to have the football club chairman jailed.

The Guardian reports that Smith said: “From start to finish [the request to jail King] was designed to intimidate rather than seek a proper sanction for an alleged breach. It was a muscular tactic using the threat of committal that the court should deplore.

“We have to be alert to balance the need of an applicant with a genuine need for the court to adjudicate … and [bringing respondents to court for matters they] should not have to deal with.”

Smith awarded Rangers interim costs of £70,000 as the parties head towards a fuller hearing next month, when Sports Direct is seeking an injunction to prevent Rangers revealing details of its contracts with the retailer. The two parties have a retailing joint venture – Rangers Retail Ltd – which sells merchandise to fans of the 54-times Scottish football champions.

Smith’s written judgment added: “I have referred to Mr King’s evidence which is unchallenged that Mr Ashley is pursuing a vendetta against him. Further, I question what damage was being sustained by [Sports Direct] even if it established the breaches.

“It is therefore in my view undoubtedly the case that [Sports Direct’s] whole procedure is an abuse and it should be dismissed for that reason in addition to the various failings that I have identified above. That is not to say that Mr King may not be found to have made the disclosures upon which [Sports Direct] relies when this matter is tried, but even assuming that he did breach the June [court] order as alleged it is inappropriate to police those breaches with the heavy hand of committal proceedings”.

Sports Direct did not comment on Smith’s remarks or judgment.

In December, when Sports Direct failed to have King sent to prison, Smith queried whether Ashley was interested in having a “sensible” business relationship with the Rangers chairman “or grinding him into the dust”. The judge added: “Maybe he is interested. I don’t know.”

Sports Direct and its founder have suffered a barrage of criticism since December, in the wake of a Guardian investigation that found that the retailer was effectively paying thousands of temporary warehouse workers below the minimum wage.

The coverage led to an urgent question and debate in parliament, calls for an investigation by HM Revenue & Customs, and a denunciation from the Institute of Directors, which described Sports Direct as a “scar on British business”.

On New Year’s Eve, Sports Direct pledged £10m for a pay rise for staff from the start of this year.